Poor demand still observed in local Chinese steel pipe market

In the past week, the Chinese domestic steel pipe market has seen a downward trend in prices of both seamless and welded pipes. 
 
As of September 4, in China's three main steel markets, i.e., Shanghai, Guangzhou and Beijing, the average price of 20# (GB/T8162-1999) grade 108 mm x 4.5 mm seamless pipe now stands at $610/mt, with 20# (GB/T8163-1999) grade 219 mm x 6 mm seamless pipe at $637/mt. Meanwhile, on the same date, Q195-215 grade 48 mm x 3.25 mm welded pipe and Q215-235 grade 114 mm x 3.75 mm welded pipe prices in the above markets are standing at $520/mt and $528/mt respectively. All the above prices include 17 percent VAT.
 
Chinese domestic seamless pipe prices have moved on a downward trend during the past week, while trading activity is still at low levels. Upstream billet prices have declined and local seamless pipe producers have reduced their quotations, Although traders had been expecting improvements in demand in September, they are now keeping their inventories at low levels as they fear that seamless pipe prices may fall further. Most traders believe that the domestic seamless pipe market will continue its downward movement in the coming week, though the decrease margin will likely be smaller.
 
The local Chinese welded pipe market has seen a declining trend in the past week, with softer steel strip prices contributing to this downward movement, while demand for welded pipes has been very low. Most traders are maintaining a wait-and-see stance. They lack optimism and have been purchasing only in line with their needs. As for the coming week, it is thought that the downtrend in domestic welded pipe prices may continue.